Edinburgh city council is looking into extending the tram network to Newhaven, Ocean Terminal or the foot of Leith Walk.
City leaders will approach the Scottish Government for help with paying for a potential £145 million extension.
Figures for the cost of completing the line have been published in an outline business case, which will be tested against quotes provided by construction firms interested in carrying out the work.
Council chiefs said a government grant was one option being considered to help fund the line, despite the SNP administration’s insistence that it would pay “not a penny more” towards the troubled project.
The Scottish Government said it had “no plans” to make a further contribution to the plans, but was open to holding talks to discuss the issue.
When the SNP lost a vote at the Scottish Parliament in 2007, forcing the Scottish Government to provide £500m towards construction of the tram, finance secretary John Swinney said: “I’ll contribute the finances the government has said it will contribute, not a penny more, absolutely not a penny more, not even to rescue it.”
However, city transport convener Lesley Hinds said the authority would approach Holyrood regardless, saying governments had funded tram projects in England and Ireland from taxpayers’ cash.
“The Scottish Government have said they would not give any further resources to the Edinburgh Trams, but obviously we would still like to have discussions with them,” she said. “If we want to [extend], we need that capital sum, and if you look at most tram projects, such as Dublin, Nottingham, Manchester, the capital funding normally comes from the national government. That’s the normal process.”
Four options have been set out for extending the line, with proposals to take the tram to the Foot of Leith Walk, Ocean Terminal, and all the way to Newhaven – as originally planned eight years ago. The fourth, to extend the line only as far as McDonald Road, has effectively been ruled out.
The report sets out the costs. Newhaven comes with a price tag of £144.7m with inflation, while the Ocean Terminal option would cost £126.6m and Leith Walk £78.7m. If the line was fully extended to Newhaven, city officers estimate it could almost double passenger numbers by 2027, with up to 18.7 million journeys per year.
Based on the tram’s existing business plan, that could boost ticket revenues by up to £17m, helping the service turn a larger operating profit and allowing the city to break even on its investment earlier than the 15 years currently predicted.
Other sources of funding being considered alongside a government grant include EU finance, private investment, or using funds from a City Deal bid being prepared which could unlock billions of pounds of infrastructure investment.
Councillor Hinds added: “I am extremely pleased with the progress of the business case, which already shows the clear economic impact the extension of the tram line could have on the city.
“But we don’t want to make any rash decisions about the future of the project, and that’s why further due diligence is required to ensure a robust financial case.”